Canada, Germany to Expand Auto Sector Collaboration
Canadian collaboration with Germany’s auto sector is set to expand, as the nations signed a joint declaration to expand their industrial cooperation. In particular, the agreement will focus on electric vehicles (EV) and hydrogen mobility.
"With this joint declaration, Canada and Germany are […] advancing battery and critical minerals partnerships, and drawing high-value investment into communities across the country,” said Canada’s minister of industry and economic development, Mélanie Joly. “This agreement will help grow and modernize Canada’s auto sector.”
Few details about the arrangement have been shared, but the government of Canada says that it aims to diversify the nation’s economy by attracting new invesmtents that will create new opportunities for Canadian workers and will build economic resilience.
Meanwhile, Germany’s minister for economic affairs, Katherina Reiche, said she expects the arrangement to safeguard supply chains and to promote forward-looking technologies.
Indeed, since Canada’s largest trading partner, the United States, launched trade aggression against it (among other nations), Prime Minister Mark Carney has announced numerous agreements with other automaking nations, including South Korea and China, and Minister Joly is willing to wheel and deal for a plant.
Late last week, she confirmed to Autonews that Canada is aiming to secure a vehicle manufacturing plant in exchange for awarding a $12 billion submarine contract to a supplier from either South Korea or Germany.
So far, neither nation's automakers operate vehicle manufacturing plants in Canada, but, in 2023, Volkswagen subsidiary PowerCo SE announced that it would establish an EV battery plant in St. Thomas, Ont. Although the furor over EVs is fading and trade issues have complicated North American supply lines, Volkswagen has so far remained committed to opening plant in 2027.
Auto industry experts, however, are urging the government not to forget the United States in its quest for new trade partners. As the Canada-United States-Mexico Agreement (CUSMA) comes up for review, Michael Robinette, the VP of forecast at S&P Global Mobility said that Canada needs the U.S., which is currently the destination for 70 to 80 per cent of Canada’s automotive production, per Autonews.
Flavio Volpe, the president of the Automotive Parts Manufacturer’s Association concurred. He argued that the North American automotive sector’s success is contingent upon the free movement of parts across Canada, the U.S., and Mexico. The loss of tariff exemptions would “shut down the industry,” he claimed. Indeed, even in the case of Volkswagen’s St. Thomas battery plant, free trade appears to be central to the automaker’s plans for the facility. While this move won't solve the issues plaguing Canada's auto sector, something must be done.
